Another infrastructure investment company, IPP, has recently bought shares in Cadent (formerly National Grid’s gas distribution network).
The recent performance of infrastructure investment trusts has become positively correlated with the share prices of utility companies in the FTSE 100 Index (figure 6).
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It remains to be seen whether this shift will last but for now we are holding off from increasing our weighting to this asset class.
We believe that better returns from diversifying assets lie elsewhere, such as long–short equity, event driven, discretionary macro and managed futures strategies.
Mona Shah is head of collectives research for Rathbones
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